M/S. RAVI ASHISH LAND DEVELOPERS LTD., MUMBAI V. ITO 9(3)4, MUMBAI

ITA 508/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5030 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2002-2003
• Appeal Filed On: 18-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: BIKASH KUMAR BOGI
• Section: 68

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI .. , ! ' # , $ ', % BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NO.508/MUM/2011 : ASST.YEAR 2002-2003 M/S.RAVI ASHISH LAND DEVELOPERS LTD. 76 LAXMI8 PALACE, MATHURADAS ROAD KANDIVALI (WEST), MUMBAI 400 067. PAN : AAACR3476Q. THE INCOME TAX OFFICER WARD 9(3)-4 MUMBAI. ( &' / // / APPELLANT) ) ) ) ) / VS. ( *+&'/ RESPONDENT) &' , ,, , - - - - / APPELLANT BY : SHRI BIKASH KUMAR BOGI *+&' , - , - , - , - / RESPONDENT BY : SHRI NEERAJ BANSAL ) , .! / / / / DATE OF HEARING : 12.09.2013 /01 , .! / DATE OF PRONOUNCEMENT : 13.09.2013 ' 2 ' 2 ' 2 ' 2 / / / / O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 15.11.2010 IN RELATION TO THE ASSESSMENT YEAR 2002-2003. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF ` 4,26,000 U/S 68 OF THE ACT. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE, A BUILDER, DECLARED ADVANCE RECEIPTS AMOUNTING TO ` 8.26 CRORE, OUT OF WHICH ` 3.27 CRORE WAS ON ACCOUNT OF PROJECT WHICH HAD NOT STARTED CONSTRUCTI ON. THE TRIBUNAL IN THE FIRST ROUND RESTORED THE MATTER TO THE FILE OF A.O. FOR CONSIDERING ITA NO.508/MUM/2011. M/S.RAVI ASHISH LAND DEVELOPERS LTD. 2 THE ADDITION U/S 68 AMOUNTING TO ` 42.26 LAKH IN THE LIGHT OF FRESH MATERIAL PROPOSED TO BE ADDUCED BY THE ASSESSEE. IN THE CURRENT PROCEEDINGS, THE ASSESSING OFFICER GOT SATISFIED W ITH THE ASSESSEES SUBMISSIONS EXCEPT FOR A SUM OF ` 4,26,000 WHICH REPRESENTS SMALL ADVANCE RECEIPTS FROM 23 PERSONS TABULATED ON PAGE 3 OF THE ASSESSMENT ORDER. THE ASSESSEE CLAIMED THAT THESE A DVANCES WERE RECEIVED ON ACCOUNT OF FLAT BOOKINGS. THE ASSESSING OFFICER MADE ADDITION FOR THIS SUM ON THE GROUND THAT THE ASSESS EE COULD NOT FILE ANY EVIDENCE LIKE SALE DEED, INCOME TAX PARTICULARS AND COPY OF REFUND ETC. THE LEARNED CIT(A) SUSTAINED THE ADDITI ON. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND FROM THE DETAI LS OF SUCH ADVANCES GIVEN ON PAGE 17 OF THE PAPER BOOK THAT THE ASSESSE E REFUNDED A SUM OF ` 1,41,000 TO TEN PARTIES THROUGH BANKING CHANNEL IN SUBSEQUENT YEARS. A SUM OF ` 1,74,000 RECEIVED AS ADVANCE FROM NINE PARTIES WAS ADJUSTED AGAINST THE SALE OF FLAT. A SUM OF ` 50,000 FROM CHANDRU K.PANJWANI WAS TRANSFERRED BY THE ASSESSEE TO THE P ROFIT AND LOSS ACCOUNT IN THE FINANCIAL YEAR 2008-2009. NOTHING IS FORTHCOMING FROM THE SIDE OF THE ASSESSEE IN RESPECT OF LAST THREE P ARTIES FROM WHOM ADVANCES OF ` 61,000 WAS RECEIVED. INSOFAR AS THE SUM OF ` 1,41,000 REFUNDED TO TEN PARTIES IS CONCERNED, WE FIND IT AS AN UNDISPUTED FACT THAT THE ASSESSEE MADE A CLAIM BEFORE THE A.O. THAT SUCH ADVANCES WERE RECEIVED TOWARDS THE BOOKING OF FLATS. NO EFFO RT WAS MADE BY THE ASSESSING OFFICER TO VERIFY ABOUT THE GENUINENE SS OF THE ASSESSEES CLAIM. THE ASSESSING OFFICER DISALLOWED THE AMOUNT BY ITA NO.508/MUM/2011. M/S.RAVI ASHISH LAND DEVELOPERS LTD. 3 INVOKING THE PROVISIONS OF SECTION 68 WITHOUT SHOWI NG AS TO HOW THE ASSESSEES CONTENTION WAS INCORRECT. WHEN WE CONSID ER THE POSITION IN ENTIRETY, IT COMES OUT THAT THE ASSESSEE RECEIVE D ADVANCES OF ` 1,41,000 FROM TEN PARTIES AND RETURNED THE SAME IN SUBSEQUENT YEARS ON THE CANCELLATION OF FLATS. THERE CAN BE NO QUEST ION OF MAKING ADDITION U/S 68 ON THIS SCORE BECAUSE THE GENUINENE SS OF THE TRANSACTIONS ALONG WITH OTHER NECESSARY INGREDIENTS OF SECTION 68 STANDS PROVED. AS REGARDS THE OTHER NINE PARTIES FR OM WHOM THE ADVANCES OF ` 1,74,000 WAS RECEIVED, THE ASSESSEE OBVIOUSLY ADJUS TED THESE ADVANCES AGAINST THE FLATS SOLD IN LATER YEAR S AND DESCRIPTION OF FLATS ALLOTTED TO THESE PARTIES IS AVAILABLE ON TH E SAME PAGE, WHICH WAS ALSO BEFORE THE AUTHORITIES BELOW. WHEN THE ADVA NCE RECEIVED TOWARDS BOOKING OF FLATS HAS BEEN ADJUSTED AGAINST THE SALE OF FLATS, THERE CAN BE NO QUESTION OF MAKING ANY ADDITION FOR THIS SUM. A SUM OF ` 50,000 HAS BEEN ACCEPTED BY THE ASSESSEE TO BE ITS INCOME OF THE FINANCIAL YEAR 2008-2009. THIS AMOUNT IS RIGHTLY RE QUIRED TO BE TAXED IN THE YEAR UNDER CONSIDERATION BECAUSE THE CREDIT AROSE IN THIS YEAR WHICH HAS NOT BEEN SUCCESSFULLY EXPLAINED BY THE AS SESSEE. SIMILAR IS THE POSITION AS REGARDS THE REMAINING SUM OF ` 61,000 REPRESENTING ADVANCES FROM THREE PERSONS WHICH IS STILL UNEXPLAI NED. IN OUR CONSIDERED OPINION, THE ADDITION IS LIABLE TO BE SU STAINED FOR THIS SUM OF ` 61,000 AS WELL. WE, THEREFORE, SUSTAIN THE ADDITIO N AT ` 1,11,000. 4. 3 .4 5 62 . 7 , 8. 9: IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ITA NO.508/MUM/2011. M/S.RAVI ASHISH LAND DEVELOPERS LTD. 4 ORDER PRONOUNCED ON THIS 13 TH DAY OF SEPTEMBER, 2013. ' 2 , /01 ;')4 0 , < SD/- SD/- (VIVEK VARMA) (R.S.SYAL) $ ' $ ' $ ' $ ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; ;') DATED : 13 TH SEPTEMBER, 2013. DEVDAS* ' 2 , *$.6# = #1. ' 2 , *$.6# = #1. ' 2 , *$.6# = #1. ' 2 , *$.6# = #1./ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. *+&' / THE RESPONDENT. 3. > () / THE CIT, MUMBAI. 4. > / CIT(A) 20, MUMBAI. 5. #A< *$.$) , , / DR, ITAT, MUMBAI 6. < B / GUARD FILE. ' 2) ' 2) ' 2) ' 2) / BY ORDER, +#. *$. //TRUE COPY// C C C C/ // /9 8 9 8 9 8 9 8 ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI